Author: BITWU.ETH Source: X, @BTW0205

I have been pushing for a long time and now I understand the whole process before and after the plunge. This plunge is not only a single event, but also a microcosm of the structural contradiction between "decentralized ideal" and "centralized reality".

MANTRA is a DeFi platform based on the Cosmos SDK, focusing on real-world asset tokenization (RWA), and the native token $OM has increased by 500 times in a year.

- On March 20, a community user monitored that some OM large users withdrew coins and transferred to the trading platform. There were rumors that OM had completed several major discounts over-the-counter transactions.

- Then many OM big players smashed the market, the price of the currency continued to fall, many OTC buyers were trapped, and the community panic spread and began to take the lead.

- In the early morning of April 14, the price of $OM plummeted from 6.2u to 0.4u, a drop of more than 90%, and the market value evaporated by US$5.5 billion in 2 hours.

- On-chain data shows that at least 17 addresses transferred a total of 43.6 million OMs to the exchange before the OM plunge, 2 of which were associated with strategic investor Laser Digital. (Speculation sell-off)

- The MANTRA team denied "running away", saying the plunge was triggered by "other (CEX) improper forced closing positions during low liquidity periods (early morning in Asia"" and suspected that the exchange had negligence or market manipulation.

It also emphasizes that the token is still locked and no selling involved in team or core investors.

On-chain data also showed that there were a large number of liquidation orders during the plunge, resulting in chain selling, and insufficient market depth exacerbating the decline.

1) There is actually a power game between the project party and the CEX

A very deep contradiction is that CEX is both a liquidity provider and a potential conflict of interest.For example, the exchange may obtain fee income through clearing without being responsible for the project ecology.

MANTRA repeatedly hinted that the project party lacked practical binding force on CEX and accused CEX of abusing its discretion.

CEX allows liquidation during inactive periods, essentially passing risks to retail investors.

It's like suddenly closing all emergency lanes on the highway at 3 a.m., any vehicle breaks down and will trigger a rear-end collision for hundreds of vehicles.

2) The "valuation trap" of high FDV and low circulation projects

OM's FDV/TVL ratio is as high as 730 times, far exceeding the industry's healthy level (usually below 50 times).

This extremely unhealthy indicator shows that the market value of OM is far beyond the actual value support and is easily short or liquidated. The smart funds that were questioned before may be bearish + short + liquidation and counter-kill, waiting for the emotional point to explode, which is indeed consistent with the on-chain data.

Create scarcity by locking positions, attracting speculative funds to push up market value, and eventually retail investors take over.

After the plunge, the project parties, CEXs, and market makers all tried to clear their responsibilities, but all three were sharing the interests of listing coins, and there was a possibility of conspiracy in the interest chain. Is it possible to jointly control the market and strangle retail investors?

Different responsibility is itself the best breeding ground for market manipulation.

CEX actually grasps the token pricing power by controlling liquidity and liquidity, and power is the way to improve the risk control mechanism (such as dynamically adjusting the liquidation threshold) to avoid regulatory vacuum to the greatest extent?

In this case, retail investors have natural information disadvantages. Project parties should also think about what to do to avoid over-reliance on centralized liquidity.

High-valuation projects that rely on "unlock expectations" and "ecological blueprint" support will collapse faster than traditional financial assets once they encounter a black swan event.

Narration bubble will eventually burst, starting from itselfNot just two points -

1. Be vigilant about the "FDV myth" and return to fundamental analysis. The real value should be based on agreement revenue and user growth, not on paper valuations.

2. Don’t hold high-leverage positions during low liquidity periods, as those who die will be slower.